THE ALBATROSS IS BACK
Gold prices have been struggling in the wake of Fed Chair Jerome Powell’s speech on Friday. As observed in the weekly gold price forecast, “rising sovereign bond yields (not limited to US Treasury yields) and a decline in inflation expectations across developed economies, curating a push higher in real yields globally. If real yields continue to climb, then gold prices will face more difficult trading conditions in the immediate future.” This is exactly what’s transpired this week, with the US 10-year real yield at +54-bps, its highest level since late-July. In a sense, the interest rate albatross is back around gold’s neck.
